Saylor URL: http://www.saylor.org/books Saylor.org
Many new convenient snack packages, such as jelly snacks and packages of different sizes, are available in China
and the United States.
Source: Wikimedia Commons.
During introduction, an organization must have enough distribution outlets (places where the product is
sold or the service is available) to get the product or service to the customers. The product quantities must
also be available to meet demand. For example, IBM’s ThinkPad was a big hit when it was first
introduced, but the demand for it was so great that IBM wasn’t able to produce enough of the product.
Cooperation from a company’s supply chain members—its manufacturers, wholesalers, and so forth—
helps ensure that supply meets demand and that value is added throughout the process.
When you were growing up, you may remember eating Rice Krispies Treats cereal, a very popular
product. The product was so popular that Kellogg’s could not keep up with initial demand and placed ads
to consumers apologizing for the problem. When demand is higher than supply, the door opens for
competitors to enter the market, which is what happened when the microwave was introduced. Most
people own a microwave, and prices have dropped significantly since Amana introduced the first
microwave at a price of almost $500. As consumers in the United States initially saw and heard about the
product, sales increased from forty thousand units to over a million units in only a few years. Sales in
Japan increased even more rapidly due to a lower price. As a result of the high demand in both countries,
many competitors entered the market and prices dropped. [4]
Product pricing strategies in the introductory stage can vary depending on the type of product, competing
products, the extra value the product provides consumers versus existing offerings, and the costs of
developing and producing the product. Organizations want consumers to perceive that a new offering is